Steady top line growth in a mixed market

• Orders and revenues increased, orders steady to higher in all regions
• Operational EBITDA and margin lower vs Q2 2011, margin up 1% point vs Q1 2012
• Thomas & Betts acquisition completed, solid first contribution to operational EBITDA
• Significant foreign exchange translation negatively impacts top line and earnings

Zurich, Switzerland, July 26, 2012 – ABB reported higher orders and revenues in the second quarter of 2012 despite short-term macroeconomic volatility as customers in almost all regions continued to invest in power grid upgrades and improved industrial productivity.

Orders received grew 9 percent (6 percent organic) to $10.1 billion while revenues rose to $9.7 billion, representing a 6 percent increase (3 percent organic). Utilities continued to invest in transmission grids, while industrial customers, especially in oil and gas, increased spending to secure reliable power and improve productivity.

Operational EBITDA amounted to $1.5 billion, a 5 percent decrease compared to the same quarter in 2011 (-9 percent organic). The operational EBITDA margin was 15.1 percent versus 16.0 percent the previous year. Cost savings of about $280 million offset the impact of lower prices and project margin slippages, while growth investments in selling and R&D supported volume increases. An unfavorable business mix also impacted the operational EBITDA margin, while significant differences in foreign exchange rates compared with the second quarter of 2011 reduced our US-dollar reported revenues by approximately $600 million and operational EBITDA by approximately $100 million.

Cash flow from operations was approximately $300 million lower than Q2 last year. Total divisional cash from operations increased by $40 million. Group cash flow reflects lower cash generation from hedging of corporate exposures as a result of the strengthening US dollar.

Net income amounted to $656 million, including the negative impact of the strengthening US dollar and transaction and amortization-related charges of approximately $100 million related to the acquisition of US low voltage product manufacturer Thomas & Betts, which was completed on May 16 of this year.

“These results clearly show how our balanced business and regional scope, together with good execution on cost, allow us to produce solid results even in a mixed market,” said Joe Hogan, ABB’s CEO. “We’re also satisfied to see operational profitability improve compared to the first quarter. The macroeconomic view remains uncertain, but the positive developments we’ve seen in China, the continued strength of the US market and our resilience in Europe make us more confident about the short-term outlook than we were three months ago.”

ABB Group Corporate Communications, Zurich
Thomas Schmidt, Antonio Ligi
Tel: 41 43 317 6568
Fax: 41 43 317 7958
media.relations@ch.abb.com 

Investor Relations
Switzerland: Tel. 41 43 317 7111
USA: Tel. 1 919 807 5758
investor.relations@ch.abb.com

The complete press release including the appendices is available at http://www.abb.com/news

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